'Rate tarts' going out of fashion

SO-CALLED 'rate tarts' who switch from one 0% introductory credit card deal to another to avoid paying interest may be a thing of the past, research claimed today.

For only 8% of people are looking to change their credit card in the coming three months, according to investment bank Morgan Stanley.At the same time the group said just 19% of people who had recently applied for a new card said they had been with their current provider for less than two years.

People who had applied for a new card in the past month had been with their current provider for an average of six and a quarter years. And those who said they were very likely, or quite likely to change provider, had had their current credit card for around four and a half years.

The research comes as a number of credit card companies have introduced transfer charges for people who want to shift their outstanding credit card balances to a new card to take advantage of a 0% introductory rate.

Patrick Muir, marketing director at Morgan Stanley Consumer Banking, said: 'Our research suggests that cardholders are wising up to short term deals, as the majority of those currently switching or planning to switch are not moving from one short term offer to another. Lower long-term interest rates and reward schemes look set to become even more popular.'

People in their 20s are most likely to be planning to change credit card provider in the next three months with 16% intending to switch, while the over fifties were least likely to be doing so with only 4% expecting to take out a new card.

People in Yorkshire and Humberside and the West Midlands lead the way in card switching with 13% planning to take out a new card, something only 2% of people in Scotland and Wales think they will do.